Scotland's greatest living poet, Edwin Morgan, yesterday won one of the most prestigious prizes in Scottish literature.

The nation's Makar, or national poet, won the £25,000 Scottish Arts Council (SAC) book of the year award for his latest collection of poetry, A Book of Lives.

The poet, 88, was awarded the prize at the SAC award ceremony which this year was held for the first time at the Borders Book Festival in Melrose.

The SAC described the book as being a "powerful distillation of the remarkably diverse range of themes, styles, and forms that characterise Morgan's endlessly inventive poetic world.

"Confronting global issues such as the war on terror' and major historical events closer to home, such as Bannockburn or the opening of the Scottish Parliament, this is also a collection of remarkable personal candour and intimacy; at its heart is a major sequence, Love and a Life, exploring the eternal dynamic between life and art."

Morgan described the process of writing the book as a process of breaking down barriers. "I believe there are no barriers in subject matter or style in poetry," he said.

"And you can only persuade people of that if you're actually writing it if it's any good, the collection must be more than just a book of lives. The title is meant to set you off thinking, off on a course of ideas."

The judging panel for the prize included the writer Janice Galloway, the academic, literary critic and poet Rory Watson, Lilias Fraser, the reader development officer at the Scottish Poetry Library and Dr Gavin Wallace, head of literature at the SAC.

Morgan won the prize after being shortlisted with Ali Smith, Robert MacFarlane and Jane McKee, who each received prizes of £5000.

The total prize-winning cheque of £25,000 - £20,000 for winning, £5000 for being shortlisted - makes it the fourth-most-lucrative prize in the UK.

Linda Fabiani, the Culture Minister, said: "Edwin Morgan yet again shows what a joy and privilege it is to have him as our National Poet."

The awards were sponsored by Sundial Properties.